Diamond companies not certain about security of tenure

Source: Diamond companies not certain about security of tenure | The Herald July 19, 2016

Companies that were mining diamonds in the Chiadzwa area of Marange, Manicaland province were not certain about security of tenure for the land they were operating on and maximised by fully exhausting the richest parts of the concessions until the government eventually cancelled their licenses early this year, Parliament heard on Monday.The government estimates that it lost about $13 billion in underhand dealings in nearly 10 years that the firms had been mining the gems in the Chiadzwa diamond fields.

All operations at the fields were subsequently shutdown with the government establishing one firm, the Zimbabwe Consolidated Diamond Company (ZCDC) to exclusively mine the gems.

Former mineral resources executive at the ZCDC, Takawira Zhou, told the Parliamentary Portfolio Committee on Mines and Energy that most of the firms had not done studies to quantify the possible amount of diamonds in the areas that they were allocated to mine before commencing operations.

“People tried to start evaluating the deposits when they realised that the deposits were actually running very thin,” said Mr Zhou.

“A lot of those companies did not have plans for the future for their operations. It looked like they were not sure of the security of tenure of the pieces of ground that they were given so they rushed into very rich pieces of ground and exploited as much as they could in the time that they had.”

Mr Zhou said some of the miners were initially getting 20 and 45 carats per ton but overtime this went down to as low as 20 carats per 100 tons.

“The companies that started exploiting the resources there chose the richest pieces of ground from any other ground they were given and they never bothered to look at the whole parcel that they were given and to plan as to how to exploit those resources,” he said.

He said due to declining grades, some of the companies were forced to rework on ground that they had worked on before.

Mr Zhou said the ZCDC had tried to do underground diamond mining after realising they could not continue to get much through alluvial mining.

“When we tried to do conglomerate, we realised that it was not child’s play. We almost lost every bit of equipment that we had before we could produce anything so we had to scale back and do a rethinking of the conglomerate,” he said.

He said it was a blessing in disguise for the firms that most of the gems were on top of the ground which did not require much investment to mine.

“When you get to conglomerate, the grades are very low. The process of extracting a diamond from that conglomerate is very expensive,” he said.

Mr Zhou said the decision to consolidate the mines might not be worthwhile as the resource was depleted. – New Ziana.